of a calendar year, accompanied the plaintiff's share of profits for the preceding year with a letter urging employees to take a more active interest in the welfare of the business "in which they share the profits," it was held in Snyder v. Hershey Chocolate Co. (1916) 63 Pa. Super. Ct. 528, that on continuing in the service of the company during the following year, until December 14, when, without definite discharge, his services, though not shown to be unsatisfactory, were dispensed with, the plaintiff was entitled to recover his share of the profits for the entire year, the company having at the close of that year given a bonus of 20 per cent to its employees. The court took the view that as an inducement for employees to continue in the service the company had offered a distribution of profits if any were made, that this amount became definite when the amount of distribution was subsequently determined upon, and that the failure of the employer to assign the plaintiff to duty when he was ready and willing to render services for the short remaining period of the year did not prevent his recovery of the entire amount of the bonus paid each employee for that year.

The above case is followed, in an action against the same company by an employee to recover a bonus, in Scholl V. Hershey Chocolate Co. (1918) 71 Pa. Super. Ct. 244.

Reaching a different conclusion, but perhaps distinguishable on the facts, from the above cases, is Russell v. H. W. Johns-Manville Co. (1921) 53 Cal. App. 572, 200 Pac. 668, where, on October 15, a company issued a notice stating that, in recognition of efficient service during the year, the company would pay, as additional compensation for that year to all salaried employees who had been in the company's employ for the calendar year, 20 per cent of the yearly salary in each case, payable 10 per cent on February 1, and 10 per cent on March 1, of the year following; and it was held that an employee on a monthly salary who was discharged

a month after the issuance of this notice, the discharge being without cause, but so far as shown without fraud or bad faith, could not recover the bonus from his employer, since, the employment being from month to month, the latter had the right to discharge the employee at any time without cause, and the offer was of a mere gratuity on certain terms which had not been fulfilled. The court said: "The written notice issued to its salaried employees was in form and upon its face a voluntary gratuity to such of said employees as might be in its service during the entire year 1918. It did not purport to change the terms of their past, present, or future employment, nor, in the case of month-to-month employees, did it purport to bind the corporation issuing it to a different term of employment than that already existing; nor did it exact or require of such employees that they should make any surrender of their right to quit the corporation service at the close of any month thereafter. The respondent himself does

here contend that he was either required to make, or did in fact make, any such surrender, his utmost claim and proof being that he was willing to remain, and did in fact remain, in the employ of the defendant after receipt of said notice and up to the time of his discharge; but he neither pleaded nor testified, nor did the trial court find, that he was legally bound to so remain or that he, in so remaining, did anything other or further than that which he was willing to do and would have done if such notice had never been issued by his employer or received by himself."

III. Discharge for cause.

The principle that where one is discharged for cause before the extra compensation or bonus becomes payable, and has not, therefore, performed the condition on which it was payable by continuing in the service until a certain time, he cannot recover such extra compensation even proportionately according to the time. served, is applied in McGregor v.

Harm (1910) 19 N. D. 599, 30 L.R.A. (N.S.) 649, 125 N. W. 885, where the plaintiff was employed by the defendants as a bartender at $20 per week, under an agreement that if he worked for a year and kept sober he should receive $5 per week in addition. In about six months after this agreement was made, the plaintiff was discharged for cause, in unreasonably refusing to work on a particular evening an hour extra time, as he was requested by his employer to do. It was held that he could not recover the $5 per week for the time served, as he had not performed the contract so as to become entitled thereto.

And the proposition that if the employee, by his wrongful conduct, makes it reasonable and just for the employer to discharge him before the time fixed for payment of extra compensation, under an agreement providing that the employment shall continue so long as it is mutually satisfactory and fixing the rate of wages, but providing that the employee shall be entitled to certain extra compensation per month if he remains in the service until a specified date, and not otherwise, the employee forfeits the right to the extra compensation, is supported by Haag v. Rogers (1911) 9 Ga. App. 650, 72 S. E. 46.

So, in the reported case (ROBERTS V. MAYS MILLS, ante, 338), although the court properly holds that the employer cannot deprive the employee of the bonus already earned by discharging him without legal and sufficient grounds, it points out that, if such grounds exist, the bonus, on the employee's discharge, is forfeited.

IV. Voluntary termination of employment by employee.

The rule is laid down in Haag v. Rogers (1911) 9 Ga. App. 650, 72 S. E. 46, that where a contract of employment provides that it shall remain in force so long as is mutually satisfactory, and fixes the rate of wages, but provides that the employee shall be entitled to certain extra compensation per month if he remains in

the service until a specified date, and not otherwise, the proper construction of the agreement is that either party may terminate the contract at will; and if the employee quits before the time set, he forfeits the extra compensation.

And in the reported case (ROBERTS v. MAYS MILLS, ante, 338) the court expresses the opinion (obiter) that if the employee fails to remain for the specified time he forfeits all claim to the bonus.

Where allotments of stock as special compensation to employees. under a bonus plan were on the condition that if the person to whom the stock was allotted should "voluntarily quit" the employment within the period of five years he should forfeit all right to the bonus stock, it was held in Schotter v. Carnegie Steel Co. (1922) 272 Pa. 437, 116 Atl. 358, that the employee had "voluntarily" quit the employment, so as to effect a forfeiture of his stock where the employment was terminated by mutual consent of employer and employee, after the latter sought advice from his employer regarding a position offered by another company.

A case which likewise involves the question whether the leaving of the service was voluntary, so as to deprive the employee of the bonus, is Stretch v. Scout Motors Co. [1918] W. N. (Eng.) 238, 87 L. J. K. B. N. S. 1006, 118 L. T. N. S. 665, 34 Times L. R. 544, 62 Sol. Jo. 651-C. A., in which it was held that one who volunteered for service as a war munition volunteer, and about a year later was required by the Minister of Munitions. to enter the service of another firm, voluntarily left the service of his original employer and was, therefore, disentitled to a bonus offered by that employer by a notice stating that a war bonus of 10 per cent would be credited to all employees, to be cumulative until the end of the war, when a disbursement would be made, but expressly declaring that "should any employee leave the service of this company for any reason" before the date of disbursement, such employee would forfeit all claim

to the bonus. In this instance a workman in an engineering plant responded to the call of the National Advisory Committee addressed to workmen engaged in various trades, inviting them to volunteer as war munition volunteers, the latter agreeing to accept employment of making munitions in such controlled establishments as might be named by the Minister of Munitions. It was held that the subsequent transfer of the volunteer from the employment in which he was engaged, though under compulsion, was referable to his original act in volunteering, and that he could not therefore claim the bonus on the ground that he had not left the service voluntarily.

And where an order of the Director General of Railroads, promulgated in 1918, made retroactive a wage increase as to railroad employees who were then in the service, or who, after the wage increase became effective, had been dismissed from the service, but precluded those who had "voluntarily" left the service from sharing in the back pay so provided for, it was held in Margoris v. United States R. Administration (1919) 187 Iowa, 605, 174 N. W. 371, that an employee who left the service because he was not physically able to do the work was not entitled to recover the extra compensation, since he had left "voluntarily" within the meaning of the order; and that a petition by him to recover such back pay, alleging that he left the service involuntarily because he was not well and was physically unable to continue the work assigned to him, was subject to demurrer.

Although the court calls attention to the fact that the contract was not made between parties who were to occupy the relationship of master and servant, and therefore the case is not on facts within the scope of the present annotation, attention is called to Whitney v. Whitney Bros. Co. (1913) 152 Wis. 453, 140 N. W. 35, in which it was held that a foreman of a corporation who gave his note to certain shareholders therein, payable in five years, and who obtained

from them shares of stock, which were their personal property and which were hypothecated as security for the note, under an agreement that if he continued in the service for the full five-year period the note should be deemed paid and the stock surrendered to him, was not entitled, on abandoning the service within the five-year period, to credit on the note for a proportional part thereof according to the time served. The authority of the case, however, for the proposition that the employee is not entitled to a proportionate credit where he voluntarily quits the service, is somewhat weakened by the fact that there was in this instance a specific provision in the contract respecting termination of employment, in that it was provided that the employee might at any time within the five-year period withdraw from his position, from his position, surrender his stock, and receive back the note, being entitled to receive dividends on the stock earned up to the time of its surrender.

And although, perhaps, not a case of a bonus contract, strictly speaking, attention is called to Gateway Produce Co. v. Davis (1921) Tex. Civ. App. —, 228 S. W. 346, where the contract of employment of a salesman provided for a maximum compensation of 50 per cent of the net profits on sales made by him, payable, 40 per cent as presently earned at the end of each week, and 10 per cent as earned at the end of each year's service, upon condition that the employee should remain in the service of and sell goods for the employer for a full year; and the contract also declared that the employee should "forfeit all credits which he may have on our books" should he leave the service for any cause before the end of the year; it was held that the employee was not entitled to the 10 per cent of the profits when, during the year, he voluntarily quit the service.

Distinguishable on the facts from the cases above set out is Smith v. White Owl Drug Co. (1922) Manitoba,, 70 D. L. R. 550, [1922]

3 West. Week. Rep. 501, in which it was held that a clerk who was in the service of his employer at the close of the calendar year, when the bonus to which the employees were entitled, under the profit-sharing plan, accrued, was entitled thereto; although he resigned and left the employment several months thereafter, where the employer had given notice of inauguration of a profit-sharing system by which clerks, in addition to their usual salaries, should be paid a special bonus representing one fifth of the actual net profit, to be reckoned on or about December 31st of each year, and the notice declared that in case a clerk severed his connection with the business, of his own accord, previously to the coming stock taking, or was dismissed for dishonesty, disloyalty, etc., the bonus should be forfeited. The contentions in this case were that the employee was not entitled to the bonus because there was no express agreement at the time of the hiring with respect thereto, and that he had forfeited his right for dishonesty and inefficiency, it being held there was no evidence to support these latter charges.

V. Miscellaneous.

It has been held that if the employee's lack of faithfulness and diligence in the discharge of his duties are such as to justify his discharge, if he is retained in the service, the employer cannot set up this defense as an excuse for refusal to pay a bonus, of a certain per cent of excess sales in addition to the employee's weekly salary. Abramson v. Dry Goods Refolding Co. (1917) 166 N. Y. Supp. 771.

In Dwyer v. Rathbone (1889) 1 Silv. Sup. Ct. 418, 5 N. Y. Supp. 505, where the payment of 10 per cent as additional compensation for services of the plaintiff's son in the employ of the defendants was dependent upon the latters' judgment as to the faithfulness of the labor performed. by him, it was held that there could be no recovery on his conditional promise before the lapse of the period of employment and before any deci

sion by the defendants that the son's conduct deserved this additional compensation.

As turning on a provision for payment of bonus in case of satisfactory service, although in this instance the employment was not terminated before the close of the term, attention is called also to Fischer v. Conhaim (1901) 35 Misc. 125, 71 N. Y. Supp. 315, affirmed in (1901) 35 Misc. 791, 72 N. Y. Supp. 1102, where the employment contract provided that if the employee's services during the term were satisfactory to the employer, he should receive, at the expiration of the agreement, a bonus of a certain sum per week, the employer reserving the right to discharge the employee and terminate the agreement before its expiration at any time such employer deemed the services were not up to expectations, in which case the employee should not be entitled to any part of the bonus. The employee worked for the full term of one year, and it was held, in an action to recover the bonus, that nonpayment thereof was made dependent upon an exercise by the employer of his reserved right to discharge the employee within the year; and that as the latter was not discharged but served the full term, without any expression of dissatisfaction on the part of the employer, the bonus could be recovered.

See also Alford v. Cook (1907) 107 N. Y. Supp. 710, among possibly other cases of the kind, holding that under an agreement by an employer to pay salesmen a further sum on a specified date provided sales had been satisfactory at that time, it was for the master alone to determine whether or not the services of the servant were satisfactory, and that no action would lie by the latter to recover this additional amount in case the master adjudged them unsatisfactory, and showed the reason therefor.

The question of corporate power, over the objection of a shareholder, to promise a bonus to employees, although, of course, of possible practicable importance in determin